PayPal co-founder and venture capitalist Peter Thiel has warned that the Chinese central government could back Bitcoin as a way to undermine U.S. foreign and monetary policy.
But, he added, he tried to use the euro in the same way.
Speaking at a virtual event hosted by a conservative nonprofit, the Richard Nixon Foundation, Thiel asked if the digital currency issued by the Chinese central bank, or CBDC, could threaten the status of the US dollar as as world reserve currency.
While Thiel, who is known to be pro-Bitcoin, suggested that an “internal stable currency in China” would amount to little more than a “kind of totalitarian measuring device,” he added that China could consider Bitcoin as a tool to erode dollar hegemony. :
“From a Chinese perspective, they don’t like the United States having this reserve currency because it puts a lot of weight on oil supply chains and all kinds of things like that,” he said. he said, adding:
“Even though I’m a pro-crypto and pro-Bitcoin maximalist person, I wonder if at this point Bitcoin should also be viewed in part as a Chinese financial weapon against the United States where it threatens fiat currency, but it particularly threatens the US dollar. “
Thiel alluded to Chinese efforts to denominate oil trade in euros in recent years in an attempt to undermine the dollar’s global position, saying, “I think the euro, you can think of a Chinese weapon against the dollar. – the last decade hasn’t really worked out that way, but China would have liked to see two reserve currencies, like the euro.
The venture capitalist speculated that China didn’t really want its renminbi to become the world’s reserve currency, noting that the government would have to “open their capital accounts” among other measures “they really don’t want to do.”
As such, Thiel concludes that supporting Bitcoin offers China an elegant way to weaken the dollar’s reputation internationally:
“China wants to do things to weaken [the dollar] – China’s long Bitcoin, and perhaps, from a geopolitical standpoint, the United States should be asking harder questions about exactly how it works.